Domestic Demand for Gas Limits Eastern Australian LNG Exports

Australia’s eastern LNG exports have begun to decline under the threat of the federal government’s Australian Domestic Gas Security Mechanism (ADGSM). The ADGSM gives the federal government the power to curtail LNG exports with the objective of diverting supply to the domestic market in the event of a supply shortage. The mechanism, which took effect July 1, aims to ease domestic gas prices that have recently exceeded LNG export prices. Under the ADGSM, the federal government has been assessing restrictions on exports on a project basis.